May was a month of decoupling: oil decoupled from the dollar, and global risk decoupled from the once again sharply devaluing Yuan, but most notably May was a month where Fed rate hike expectations repriced midway through the month.
Following the latest set of global economic news, most notably a mediocre set of Chinese Official and Caixin PMIs, coupled with a mix of lackluster European manufacturing reports and an abysmal Japanese PMI, European, Asian stocks and U.S. stock index futures have continued yesterday's losses. Oil slips for 4th day, heading for the longest run of declines since April, as OPEC ministers gather in Vienna ahead of a meeting on Thursday to discuss production policy.
Hong Kong's retail sales fell for the 14th consecutive month in April, plunging 7.5 percent from a year ago. April was slightly less severe than a revised estimate of a 9.8 percent YoY contraction in March.
Since Abenomics was unleashed on the world (with QQE starting in April 2013), things have not worked out as the smartest men in the Japanese rooms predicted. In fact, with April's final manufacturing PMI printing at 47.7, operating conditions in Japan worsened at the sharpest pace in 40 months... since Abe began his three arrows. Output tumbled at the fastest pace in 25 months and new orders are the worst since Jan 2013. This is the death cross for Abenomics...
The weakest Japanese manufacturing PMI since the start of Abenomics...